<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-K/A-1
(Mark One)
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1997
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
Commission file No. 0-6202-2
NORD RESOURCES CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 85-0212139
- ---------------------------- ----------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
201 3rd St NW, Suite 1750, Albuquerque, NM 87102
- ------------------------------------------ ----------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (505) 766-9955
--------------
Securities registered pursuant to Section 12 (b) of the Act:
Name of each exchange
Title of each class on which registered
Common Stock, par New York Stock Exchange
value $.01 per share
Securities registered pursuant to Section 12 (g) of the Act: None
----------------
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ X ]
Aggregate market value of voting stock held by non-affiliates, based on the
closing price of $2.00 as of March 19, 1998, was $31,438,942.
The number of shares of Common Stock outstanding as of March 27, 1998 was
21,905,488.
<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Each director holds office until the next annual meeting of stockholders
and until their successors are elected and qualified. There are no family
relationships among any nominees or directors or among them and any officer of
the Corporation or any of its subsidiaries.
Set forth below is certain information for each director and each executive
officer named in the Summary Compensation Table.
DIRECTOR
DIRECTORS AGE SINCE
--------- --- --------
W. Pierce Carson 55 1994
Edgar F. Cruft 65 1971
Terence H. Lang 61 1978
Leonard Lichter 70 1974
Joseph Max Yvan Boulle (Max Boulle) 45 1996
Marc Franklin 44 1996
James Askew 50 1998
OFFICER
OTHER NAMED EXECUTIVE OFFICER AGE SINCE
----------------------------- --- -------
Ray W. Jenner 46 1998
Background of Directors
Mr. Boulle is an independent investment consultant to MIL. Previously he
was employed by BNP Capital Markets, London, England, as a senior institutional
sales person in European equities. Prior thereto, he worked for several
international trading companies with responsibilities ranging from trading
commodities to negotiating and closing trading contracts between American and
Russian companies. Mr. Boulle graduated from Oxford Brooks University, Oxford,
England in 1975. He is a director of Inco Ltd. and a MIL Nominee.
Dr. Carson, who holds a Ph.D. in Economic and Structural Geology, was
appointed President and Chief Executive Officer of the Corporation effective
June 1, 1997. He is also President, Chief Executive Officer and a director of
Nord Pacific Limited ("Nord Pacific"), a company which is 28.6% owned by the
Corporation. He has held these positions with Nord Pacific since its inception
in 1990. Prior thereto, beginning in 1980, he served as senior vice president of
Pacific operations for the Corporation.
Dr. Cruft, who holds a Ph.D. in Geochemistry, is a founder of the
Corporation and served as its Chairman since its inception in 1972 and Chief
Executive Officer from inception until May 31, 1997. He was President of the
Corporation from inception to 1985 and from 1988 until May 31, 1997. Dr. Cruft
is also Chairman of Nord Pacific.
Mr. Franklin has been employed since 1975 by J&S Franklin Holdings and
Management Services Ltd., London, England, a manufacturer of military and civil
equipment, and has served as a director and has been a shareholder of such
corporation since 1977.
Mr. Lang served as Senior Vice President-Finance and Treasurer upon joining
the Corporation in 1978 until his retirement on December 31, 1997. Prior
thereto, he had 15 years of experience in financial planning and management in
the business equipment industry, holding several financial
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management positions with NCR Corporation. Mr. Lang is also a director of
Nord Pacific.
Mr. Lichter, an attorney and a CPA, is a principal in the law firm of
Spitzer & Feldman P.C., New York, New York, which is counsel to the Corporation.
He is also a director of Nord Pacific.
Mr. Askew, a mining engineer, is President of International Mining and
Finance Corporation, a private mining and venture capital company. He was a
founder and the CEO of Golden Shamrock Mines Limited and sits on a number of
boards of mining and exploration companies in North America, Europe and
Australia.
OTHER NAMED EXECUTIVE OFFICER
Mr. Ray W. Jenner, Chief Financial Officer of the Corporation and Nord
Pacific since February 1998, is a chartered accountant who holds a Bachelor of
Commerce Degree in Management Science and a Bachelor of Science Degree in
Physics and Mathematics. He has 24 years experience in domestic and
international financial environments, and for the past 14 years was Vice
President and Treasurer of Echo Bay Mines where he was involved in raising
equity and securing debt financing both in Canada and the U.S. Prior to Echo
Bay, he spent ten years with Price Waterhouse in Canada, Australia and
Indonesia.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Corporation's directors, executive officers and
beneficial holders of more than 10% of the Corporation's Common Stock to file
with the Securities and Exchange Commission initial reports of ownership and
reports of changes in ownership of the common stock of the Corporation. Based on
the Corporation's review of copies of such forms it received from directors,
executive officers and beneficial holders of more than 10% of the Corporation's
common stock and on written representations from certain of such persons, the
Corporation believes that, during the year ended December 31, 1997, all filing
requirements under Section 16(a) of the Exchange Act were made by such persons
on a timely basis.
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ITEM 11. EXECUTIVE COMPENSATION
The following table discloses compensation received by the Corporation's
Chief Executive Officer and the other most highly paid executive officers at
December 31, 1997 (collectively, "Named Executive Officers") for the fiscal
years ended December 31, 1997, 1996 and 1995.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
------------
ANNUAL SECURITIES
COMPENSATION(5) UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY OPTIONS(2) COMPENSATION
- --------------------------- ---- -------------- ---------- ------------
<S> <C> <C> <C> <C>
Edgar F. Cruft(1) 1997 $ 346,771 127,775(7) $ 91,5373
Chairman 1996 $ 576,874 $ 25,745
1995 $ 576,214 17,775(4) $ 5,431
W. Pierce Carson(6) 1997 $ 300,580 600,000(8) $ 71,3773
President and Chief
Executive Officer
Terence H. Lang 1997 $ 271,615 77,775(4) $ 19,4933
Sr. VP-Finance Treasurer 1996 $ 261,555 $ 5,709
1995 $ 261,555 17,775(4) $ 4,952
</TABLE>
(1) Includes salary earned for 1997 ($112,904), 1996 ($166,810) and 1995
($158,840) as chairman and CEO of Nord Pacific. Dr. Cruft was also President
and Chief Executive Officer of the Corporation until June 1, 1997.
(2) Number of shares subject to options granted under stock option plans for
the periods presented.
(3) Included in "All Other Compensation" for 1997 are (1) matching
contributions under a 401(k) Retirement and Savings Plan for Dr. Cruft -
$23,099, (including $20,760 matched by Nord Pacific under its plan), Dr.
Carson ($20,760 matched by Nord Pacific) and Mr. Lang - $4,996, (2) the
dollar value of life insurance premiums paid by the Company with respect to
benefits for Dr. Cruft - $6,776, Dr. Carson $4,925 ($4,325 paid by Nord
Pacific), and Mr. Lang - $5,955 (3) debt forgiveness totaling $50,000 as part
of the restructuring of management with Dr. Cruft as of June 1, 1997 (4) the
fair market value of automobiles provided Dr. Cruft - $10,627, Dr. Carson
$3,850 (paid by Nord Pacific) and Mr. Lang - $6,768 and (5) $41,840 cash
compensation paid by Nord Pacific as a living allowance since Nord Pacific
requires Dr. Carson to spend a portion of his time in Australia.
(4) Replaced expired option for identical number of shares and exercise price.
(5) Non-cash benefits for each of the Named Executive Officers were less than
10% of their aggregate compensation.
(6) Includes salary earned for 1997 ($213,080) as President and CEO of Nord
Pacific.
(7) Includes options to replace expired options to purchase 77,775 shares for
identical exercise prices.
(8) Options become exercisable 200,000 on May 27, 1997, 200,000 on May 27,
1998 and 200,000 on May 27, 1999.
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The Corporation had established a loan program to fund the exercise of
stock options Dr. Cruft and Mr. Lang, who were executive officers. Such loans
were limited to $150,000 for each executive, are callable on 90 day notice by
the Board and bear interest, payable quarterly, at 1/2% over the yield on funds
invested by the Corporation. The largest amount of indebtedness outstanding
during 1997 from Messrs. Cruft and Lang was $150,000 each. $50,000 of Dr.
Cruft's loan was forgiven in June 1997 and $50,000 of Mr. Lang's loan was
forgiven in January 1998 as part of the restructuring of management as of June
1, 1997. The amount currently outstanding from Messrs. Cruft and Lang totals
$100,000 each. See "Employment Agreements" in this proxy statement.
OPTION GRANTS IN 1997
The following table presents information concerning options granted in 1997
to Named Executive Officers under the Corporation's employee option plans.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
------------------------------------------------------
% OF TOTAL POTENTIAL REALIZABLE VALUE
NUMBER OF OPTIONS AT ASSUMED ANNUAL RATES OF
SECURITIES GRANTED STOCK PRICE APPRECIATION FOR
UNDERLYING TO OPTION TERM
OPTIONS EMPLOYEES EXERCISE EXPIRATION ----------------------------
NAME GRANTED(1) IN 1997(5) PRICE(6) DATE 5% 10% 0%
- ---- ----------- ----------- --------- ---------- --- ------- ----
<S> <C> <C> <C> <C> <C> <C>
Edgar F. Cruft 17,775(2) 1.3% $5.61 01/30/01 $-- $ 7,633 $--
50,000 3.7% $4.00 06/01/00 $-- $ -- $--
60,000(2) 4.5% $7.38 10/29/99 $-- $ -- $--
W. Pierce Carson 200,000 14.9% $4.00 05/27/02 $-- $85,780 $--
200,000(3) 14.9% $5.00 05/27/02 $-- $ -- $--
200,000(4) 14.9% $6.00 05/27/02 $-- $ -- $--
Terence H. Lang 17,775(2) 1.3% $5.61 01/30/01 $-- $ 7,633 $--
60,000(2) 4.5% $7.38 10/27/99 $-- $ -- $--
</TABLE>
(1) All options are exercisable at May 1, 1998 unless otherwise noted.
(2) Replaced expired option for identical number of shares and exercise
price.
(3) Option becomes exercisable on May 27, 1998.
(4) Option becomes exercisable on May 27, 1999.
(5) The Corporation granted employees options to purchase 1,346,958 shares
in 1997, including options to purchase 155,550 shares issued to replace
expired options for the identical number of shares and exercise price.
(6) Exercise price is equal to market price at date of grant, other than the
replacement grants noted in 2, all of which are in excess of market price at
date of their grant.
(7) Dollar amounts under these columns are the result of calculations based
on assumed annualized rates
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of stock appreciation as prescribed by the Securities and Exchange
Commission. The assumed rates are not intended by the Corporation to forecast
possible future appreciation, if any, of its stock price, which will be
determined by future events and unknown factors.
AGGREGATED OPTION EXERCISES IN 1997 AND YEAR-END OPTION VALUES
The following table presents information concerning options exercised
during 1997 by the Named Executive Officers and the value of their respective
unexercised options at December 31, 1997.
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE(1)
UNDERLYING UNEXERCISED IN-
UNEXERCISED THE-MONEY
OPTIONS AT OPTIONS AT
SHARES DECEMBER 31, 1997 DECEMBER 31, 1997
ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE REALIZED UNEXERCISABLE UNEXERCISABLE
- ---- ----------- -------- ---------------- -----------------
<S> <C> <C> <C> <C>
Edgar F. Cruft None N/A 246,525 $ --
-- N/A
Terence H. Lang None N/A 162,775 $ --
-- N/A
W. Pierce Carson None N/A 215,000 $ --
400,000 $ --
</TABLE>
(1) Based on closing sale price of $1.94 for the Corporation's Common Stock
on December 31, 1997 on the New York Stock Exchange Composite Tape.
EMPLOYMENT AGREEMENTS
Effective May 31, 1997, Dr. Cruft retired as President and Chief Executive
Officer ("CEO") of the Corporation. He continues to retain the title of
Chairman of the Board. Effective June 1, 1997, the Board of Directors appointed
Dr. Pierce Carson President and Chief Executive Officer, titles he currently
holds with Nord Pacific Limited. Further, effective December 31, 1997, Terence
H. Lang retired and resigned as Senior Vice President-Finance and Treasurer. In
February, 1998, the Board of Directors appointed Raymond W. Jenner Vice
President-Finance and Chief Financial Officer.
The Corporation has an Employment Agreement (the "Carson Agreement") with
Dr. Carson describing among other things his duties as President and CEO, his
compensation level and perquisites. The term of the Agreement is from June 1,
1997 through and including May 31, 1999 and automatically extends from year to
year unless termination notice is given by Dr. Carson or the Corporation not
less than 90 days prior to the expiration of the term of the Carson Agreement.
(See "Compensation of CEO" below).
The Corporation also has a Continuation of Employment Agreement (the "Cruft
Continuation") with Dr. Cruft which runs from June 1, 1997 until May 31, 1998,
with automatic year to year extensions. Under the terms of the Cruft
Continuation, Dr. Cruft serves as Chairman of the Board and devotes no less than
12.5% of his time to the Corporation. For these services, Dr. Cruft is
compensated at a rate of $50,000 per year plus reimbursements for office
expenses, part-time secretarial, and travel and other expenses incurred on
behalf of the Corporation, and also received title to the vehicle provided by
the Corporation at no cost. Dr. Cruft also receives retirement benefits
totaling $226,653 per year under the
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terms of the Corporation's non-qualified retirement plan. This benefit will
be paid for the longer of 10 years or for the life of Dr. Cruft and his
spouse. Further, Dr. Cruft received options to purchase 50,000 shares of the
Corporation's common stock at $4.00 per share. At May 31, 1997, Dr. Cruft
owed $150,000 to the Corporation under the terms of a loan program as
described under "Compensation of Executive Officers". As per the terms of
the Cruft Continuation, $50,000 of his loan was forgiven on June 1, 1997 and
$50,000 will be forgiven on each of June 1, 1998 and June 1, 1999 so long as
Dr. Cruft does not voluntarily terminate his involvement with the Corporation.
Mr. Lang had a Continuation of Employment Agreement ("Lang
Continuation") which expired on December 31, 1997, the terms of which
described his duties and responsibilities from June 1, 1997 through December
31, 1997. Under the terms of the Lang Continuation , Mr. Lang was paid a
salary, had at his disposal a company vehicle and was entitled to other
benefits and perquisites consistent with his position. On January 1, 1998,
under the terms of the Corporation's non-qualified retirement plan, Mr. Lang
began receiving retirement benefits totaling $143,855 per year. This benefit
will be paid for the longer of 10 years or for the life of Mr. Lang and his
spouse. Further, at December 31, 1997, he owed the Corporation $150,000 as
described under "Compensation of Executive Officers" in this document. Under
the terms of the Lang Continuation, this debt is forgiven at the rate of
$50,000 per year on January 1, 1998, 1999 and 2000 so long as Mr. Lang does
not voluntarily terminate his involvement with the Company as a director
and/or consultant.
DEFINED BENEFIT RETIREMENT PLAN
The following table illustrates the estimated annual benefit payable upon
retirement to Dr. Carson at specified levels of compensation and years of
service to the Corporation.
<TABLE>
<CAPTION>
Years of Services
-------------------------------------------------------
Compensation 10 15 20 25 30
------------ -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$ 100,000 $ 15,000 $ 22,500 $ 30,000 $ 37,500 $ 45,000
$ 125,000 $ 18,750 $ 28,125 $ 37,500 $ 46,875 $ 56,250
$ 150,000 $ 22,500 $ 33,750 $ 45,000 $ 56,250 $ 67,500
$ 175,000 $ 26,250 $ 39,375 $ 52,500 $ 65,625 $ 78,750
$ 200,000 $ 30,000 $ 45,000 $ 60,000 $ 75,000 $ 90,000
</TABLE>
The non-qualified retirement agreement with Dr. Carson designated by the
Board provides annual payments for a period of 15 years beginning at age 62,
or on termination of employment, whichever is later (or anytime after age 55
in the event the provisions of the agreement with respect to early retirement
are satisfied). The payments are equal to 1.5% for each year of service to a
maximum of 30 years times Dr. Carson's average annual compensation over this
last three years of employment. The compensation covered by the plan is
based on Dr. Carson's annual salary disclosed in the Summary Compensation
Table. The portion of the percentage earned through years of service vests
at the rate of 20% per year, beginning at six years of service, and becomes
fully vested in the event of a change in control of the Corporation as
defined in the agreements. If Dr. Carson dies prior to reaching retirement,
the agreements provide for payment of a death benefit to his beneficiary in
an amount equal to three times the compensation earned during the year prior
to this death, in lieu of the above payments after retirement.
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BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
PHILOSOPHY
The Corporation applies a consistent philosophy to compensation for all
employees, including senior management. This philosophy is based on the premise
that the achievements of the Corporation result from the coordinated efforts of
all individuals working toward common objectives. The Corporation strives to
achieve those objectives through teamwork that is focused on meeting the
periodic goals established by the Corporation, the expectations of customers and
stockholders. The compensation program goals are to enable the Corporation to
attract, retain and reward key personnel who contribute to the long-term success
of the Corporation and to align compensation with business objectives and
performance. The Corporation's compensation program for executive officers is
based on the same principles applicable to compensation decisions for all
employees of the Corporation.
COMPETITIVE COMPENSATION
The Corporation is committed to providing a compensation program that helps
attract and retain key personnel of outstanding ability. The Corporation ensures
that its compensation is competitive by comparing its compensation practices
with those of other similar companies and reflects this review in its
determination of compensation.
COMPENSATION OF CEO
Dr. Carson is compensated by the Corporation at $150,000 per year. This
compensation rate became effective June 1, 1997, the date of Dr. Carson's
appointment as President and CEO of the Corporation. Dr. Carson's salary
will increase to $225,000 per year upon achievement of positive cash flow
from operations for three consecutive months of the Corporation's 50% owned
affiliate, Sierra Rutile Limited. Further, Dr. Carson was issued options to
purchase 600,000 shares of the Corporation's common stock 200,000 shares at
$4.00 per share, 200,000 shares at $5.00 per share and 200,000 shares at
$5.00 per share, which options expire on May 31, 2002 (see "Compensation of
Executive Officers").
COMPENSATION AND PERFORMANCE
Executive officers are rewarded based upon corporate performance and
individual performance. Corporate performance is evaluated by reviewing the
extent to which strategic and business plan goals are met, including such
factors as operating profit or loss and performance relative to competitors.
Individual performance is evaluated by reviewing organizational and management
development progress against set objectives and the degree to which teamwork and
Corporation values are fostered.
The Corporation applies its compensation philosophy worldwide. The
Corporation strives to achieve a balance of the compensation paid to a
particular individual and the compensation paid to other executives both inside
the Corporation and at comparable companies. The Corporation believes that
employees should understand the performance evaluation and compensation
administration process. The process of assessing performance is as follows:
1. At the beginning of the performance cycle, the evaluating manager sets
objectives and key goals.
2. The evaluating manager gives the employee ongoing feedback on
performance.
3. At the end of the performance cycle, the manager evaluates the
accomplishments of objectives/ key goals.
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4. The manager compares the results with the results of peers within the
Corporation.
5. The evaluating manager communicates the comparative results to the
employee.
6. The comparative result affects decisions on salary and stock options.
COMPENSATION VEHICLES
The Corporation has a successful history of using a simple total
compensation program that consists of cash, equity based compensation and
retirement plans. Having a compensation program that allows the Corporation to
successfully attract and retain key employees permits it to mine and produce its
industrial minerals at competitive levels of production and costs, to provide
useful products and services to customers, enhance stockholder value, motivate
technological innovation, foster teamwork and adequately reward employees. The
vehicles are:
Cash Based Compensation - The Corporation sets base salary for employees by
reviewing the aggregate of base salary and annual bonus for competitive
positions in the market, and by reviewing the employee's historical
compensation and the effect of inflation on such compensation.
Stock Option Program - The purpose of this program is to provide additional
incentives to employees to work to maximize stockholder value. The option
program also utilizes vesting periods to encourage key employees to
continue in the employ of the Corporation. The Corporation grants stock
options annually to a broad-based population representing approximately 50%
of the total employee pool.
Deferred Compensation for Senior Executives - The Corporation has entered
into separate retirement agreements with its senior executives. The
agreements provide benefits to the senior executives upon retirement based
on several factors, including the number of years of service to the
Corporation. The purpose of these retirement agreements is to provide
incentive to the senior executives to continue to provide their services to
the Corporation.
401-K Plan - The Corporation provides a retirement and savings plan for its
salaried U.S. employees pursuant to Section 401(k) of the Internal Revenue
Code. Each employee may contribute up to 15% of his or her salary to this
plan, to a maximum of $9,500 in 1997. Under the plan, the Corporation makes
a matching contribution on behalf of each participating employee of 50% of
the lower of the first 6% of each employee's salary or the percentage
actually contributed by the employee. This plan enables the Corporation to
attract and retain employees upon whom the Corporation relies in operating
its business.
COMPENSATION COMMITTEE
Leonard Lichter, Chairman
Dr. Edgar Cruft
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee in 1997 were Dr. Carson and Mr.
Lichter. Mr. Lichter, Chairman of the Compensation Committee, is a principal in
the firm of Spitzer & Feldman P.C., which firm provides legal services to the
Corporation. Dr. Carson was appointed President and CEO
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effective June 1, 1997. He served as an officer of the Corporation from 1980
through March 1990, at which time he was named, and continues to serve as,
president and a director of Nord Pacific Limited, a company which is 29%
owned by the Corporation.
STOCKHOLDER RETURN ON COMMON STOCK
The following graph compares the total annual return on the Corporation's
Common Stock with the total annual return of the Dow Jones Equity Market Index
and the Dow Jones Mining Index. The presentation assumes $100 was invested on
December 31, 1992 in the Corporation's Common Stock and in each of the indices
and any dividends were reinvested.
DOW JONES DOW JONES NORD
VALUE AS OF MINING EQUITY MARKET RESOURCES
DECEMBER 31 INDEX INDEX CORPORATION
1992 $ 100.00 $ 100.00 $ 100.00
1993 $ 118.05 $ 109.95 $ 79.59
1994 $ 116.44 $ 110.76 $ 104.08
1995 $ 143.68 $ 152.49 $ 36.73
1996 $ 145.64 $ 187.63 $ 71.43
1997 $ 144.10 $ 251.34 $ 31.63
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The following table sets forth the only persons known by the Board to be
beneficial owners of more than 5% of the outstanding shares of Common Stock of
the Corporation:
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SHARES BENEFICIALLY
OWNED AS OF
APRIL 30, 1998
NAME AND ADDRESS OF ---------------------
BENEFICIAL OWNER NUMBER % OF CLASS
MIL (Investments) S.A.
Boulevard Royal 25B
L-2449
Luxembourg, Luxembourg 6,010,000(1) 27.4%
Dimensional Fund Advisors, Inc.
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401 1,143,425(2) 5.22%
(1) MIL (Investments) S.A. ("MIL") acquired 3,160,000 shares from the
Corporation pursuant to a Stock Purchase and Sale Agreement dated April 15,
1996, 840,000 shares in a Loan Conversion on June 4, 1996, 2,000,000 shares
in a Stock Purchase and Sale Agreement dated October 2, 1996 and 10,000
shares purchased on the open market. The transactions with the Company were
private placements in reliance upon the transaction "safe harbor" afforded by
Regulation S, as promulgated by the Securities and Exchange Commission under
the Securities Act of 1933, as amended.
(2) Dimensional Fund Advisors Inc. ("Dimensional"), a registered investment
advisor, is deemed to have beneficial ownership of 1,143,425 shares of the
Corporation's common stock as of December 31, 1997, all of which shares are
held in portfolios of DFA Investment Dimensions Group Inc., a registered
open-end investment company, or in series of the DFA Investment Trust
Company, a Delaware Business trust, or the DFA Group Trust and DFA
Participation Group Trust, investment vehicles for qualified employee benefit
plans, all of which Dimensional serves as investment manager. Dimensional
disclaims beneficial ownership of all such shares.
Set forth below is certain information for each nominee for election as
a director and each executive officer named in the Summary Compensation Table
and employed by the Corporation on May 1, 1998.
SHARES BENEFICIALLY
OWNED AS OF
APRIL 30, 1998
DIRECTORS NUMBER % OF CLASS
- --------- ---------- -----------
Max Boulle(8) 65,000] (2)
W. Pierce Carson 451,040(4) 2.1%
Edgar F. Cruft 357,296(5) 1.6%
Marc Franklin(8) 65,000(3) (2)
Terence H. Lang 179,633(6) (2)
Leonard Lichter 75,750(7) (2)
James Askew(8) 25,000(3) (2)
OTHER NAMED EXECUTIVE OFFICER
Ray W. Jenner (2)
All nominees for election
of directors and other
named executive officer
as a group (8 persons) 1,218,719(9) 5.6%
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(1) Ownership includes sole voting and investment power except as otherwise
noted. When applicable, the number of shares beneficially owned includes the
number of unissued shares which the listed person (or group) has a right to
acquire within 60 days after April 30, 1998. In determining the number of
shares outstanding for computing the percent of class owned by a listed
person (or group), the number of shares outstanding of the Corporation has
been increased by the number of unissued shares which the listed person (or
group) has a right to acquire from the Corporation within 60 days after May
1, 1998.
(2) Represents less than 1% of the shares outstanding.
(3) Consists of options to purchase shares.
(4) Includes options to purchase 415,000 shares.
(5) Includes options to purchase 246,525 shares. Dr. Cruft's wife and children
own an additional 15,697 shares as to which Dr. Cruft disclaims beneficial
ownership.
(6) Includes options to purchase 162,775 shares. Mr. Lang's wife owns an
additional 21,348 shares as to which Mr. Lang disclaims beneficial ownership.
(7) Includes options to purchase 74,750 shares.
(8) Director is a MIL Nominee. MIL is indirectly 100% owned by Jean-Raymond
Boulle. Max Boulle is the brother of Jean-Raymond Boulle. There is no family
relationship between Marc Franklin or James Askew and Jean-Raymond Boulle. MIL,
as of May 1, 1998, beneficially owned 6,010,000 shares of Common Stock of the
Corporation, which amount represents 27.4% of the issued and outstanding shares
of Common Stock. Jean-Raymond Boulle also owns directly 10,000 shares.
(9) Includes options to purchase 1,029,050 shares held by directors and named
executive officer as a group.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In connection with various agreements with MIL, the size of the Board is
required to be seven (7) members. MIL has the right to designate three (3)
nominees to the Board (the "MIL Nominees") and the Board (excluding the MIL
Nominees) has the right to designate the remaining four (4) nominees. MIL is
obligated to vote its shares for the four Board nominees through and including
voting at the annual meeting to be held in 1999. The Corporation has agreed to
nominate and use its best efforts to obtain the election of the MIL Nominees at
each annual or special meeting of stockholders called for the purpose of filling
positions on the Board through and including the annual meeting to be held in
1999. Such actions shall include, without limitation, soliciting persons for the
election of directors (including the MIL Nominees) and recommending the MIL
Nominees for election to the Board in the same manner as all other nominees of
the Board for election as directors. If any MIL Nominee shall resign, be removed
or be unable to serve for any reason prior to the expiration of such MIL
Nominee's term as a director, MIL is required to notify the Board of a
replacement MIL Nominee and the Board is required to take all action necessary
to cause such replacement MIL Nominee to be elected or appointed to fill the
unexpired term of the withdrawing MIL Nominee. In addition, the size of the
Board cannot be increased or decreased without the approval of at least two (2)
of the MIL Nominees.
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Members of the Board who are not employed by the Corporation, except Mr.
Lichter, receive an annual retainer of $10,000, plus $1,000 for attending
each meeting of the Board and $800 for attending each meeting of a Committee
of the Board. Mr. Lichter, counsel to the Corporation, charges his time and
expenses to the Corporation through Spitzer & Feldman P.C.
The Corporation has a deferred compensation program for directors, other
than directors who are employees of the Corporation, its subsidiaries or
affiliates or are affiliated with entities which provide services to the
Corporation. Under this program, a qualifying director who has served as a
director for ten years will receive a lifetime payment, beginning at the
later of age 65 or his termination as a director, in an amount equal to the
annual retainer paid to the director during his last year of service as a
director. A qualifying director may elect to receive a reduced payment
beginning at age 62, provided he is not a director at that time. Messrs.
Boulle, Franklin and Askew are eligible for this program.
The Corporation paid $419,322 for legal services during 1997 to the firm
of Spitzer & Feldman, P.C. in which Leonard Lichter, a director, is a
principal.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
NORD RESOURCES CORPORATION
/s/RAY W. JENNER
- ------------------------------
RAY W. JENNER
VICE PRESIDENT FINANCE -
AUTHORIZED OFFICER
APRIL 29, 1998
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